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Carillion collapse, politics weigh on UK infra fund HICL

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LONDON (Reuters) – British infrastructure fund HICL <HICL.L> posted a 31 percent fall in full-year pre-tax profit on Wednesday and said the political environment and collapse of building contractor Carillion <CLLN.L> weighed on earnings.

The firm’s pre-tax profit fell to 122.1 million pounds for the year ending March 31 from 177.1 million a year earlier, HICL said in a statement.

Infrastructure shares have been under pressure after the opposition Labour party last year suggested nationalising private finance initiative contracts, in what would be a radical departure from existing government policy.

“Over the past year, negative political comment in the UK has weighed on the minds of investors as they consider their exposure to the asset class,” chairman Ian Russell said.

HICL reported a 59.3 million pound impact on net asset value related to 15 projects which went into default because Carillion was the facilities manager or construction contractor.

The firm’s net asset value per share was 149.6 pence at end-March, compared with 149 pence a year earlier.

However, HICL’s total dividend payment rose by 2.6 percent to 7.85 pence per share and the firm confirmed its dividend targets of 8.05 and 8.25 pence per share for the next two years.

HICL has investments in infrastructure projects in Britain, Australia, Canada, France, Ireland and the Netherlands.

HICL’s shares were trading at 144.8 pence at 0713 GMT, down 0.14 percent.

(Reporting by Carolyn Cohn and Pamela Barbaglia, editing by Maiya Keidan)

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